Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

I rise to speak on this amendment, and I want to make a few comments. To those who don't wish to stay: feel free not to stay! I'm sure Senator Cormann will stay, and he'll be very pleased to listen to what I have to say about why stage 3 is a problem.

We've outlined, both here and in the other place, Labor's position on these tax bills, which has been framed by three principles: the Australian economy needs help now, not in three or five years time; every worker needs a tax cut this term, not in three or five years time; and it is irresponsible to sign up to $95 billion worth of expenditure in 2024-25 without knowing how the budget will look then. Labor's highest priority has been to get money into the hands of workers and circulating through a weak economy. The reality is that, under this government, the economy has deteriorated markedly—even since the last election. You know what the government's priority has been? It has been $95 billion worth of tax cuts in five years that they don't want to say how they'll pay for. They won't say how they'll pay for them.

I want to return to this issue of where the economy is, because it is relevant to the decisions that Labor has outlined and the principled economic position it has taken. Frankly, the Australian economy needs a boost now—not in 2022 or in 2025. No lesser authority than the RBA has made that clear, with two interest rate cuts in two months to the lowest official cash rate in our history; we're at one per cent. In the global financial crisis it was 3.25 per cent; it is now less than a third of that. We've got the slowest economic growth in a decade. This is from the great economic managers of the coalition: the slowest economic growth in a decade; the longest per capita recession since the '82 recession; wages barely moving; new car sales have dried up; building approvals have plummeted; retail sales are barely moving; and ANZ job vacancies are down for the first time in three years. What great economic management! That's why we were prepared to support stages 1 and 2. But what we're actually arguing about here is stage 3—what happens in five years time—and we think it is irresponsible to sign up to $95 billion worth of expenditure from the budget now, five years before that starts, with absolutely no means to pay for it. That's $95 billion over six years—$12½ billion per annum in 2024-25 which grows to nearly $19 billion per annum by 2029-30.

The first year alone of the tax cuts that the crossbench, apart from Senator Hanson and Senator Roberts, have signed up for amounts to more than the government will spend on government schools—$8.3 billion—and more than the government will spend on universities or the childcare subsidy. The amount that these tax cuts cost in 2029-30 is, today, close to the entire Commonwealth spend on public hospitals. These are massive numbers with far-reaching consequences for health and for education, and actually for the sort of society we want for Australia, and we have absolutely no way, and the government has no way, of forecasting in 2019 how it can pay for $95 billion worth of tax cuts in 2024-25. The reality is that the government is actually locking in tax cuts without identifying the spending cuts which are required to fund them. That's the hard reality: it's locking in tax cuts without identifying the spending cuts which it will have to identify in order to pay for them.

The government talks a lot about a mandate. I will tell you what it has absolutely no mandate for: it has no mandate for the spending cuts to pay for the income tax cuts, because it won't tell Australians what they are. In fact, it's denying that they exist. The Treasurer, during the election, made clear that there were no spending cuts. When the Grattan Institute pointed out that it came to $40 billion a year, in terms of the gap between the government's tax promises and its spending promises, Labor state and territory treasurers demanded that the Treasurer guarantee no further funding cuts to hospitals, schools, infrastructure and other essential services. Mr Frydenberg blithely dismissed their concerns. He wrote to them. He said PEFO made sure it's all clear and that there were no spending cuts. Do you know what? The budget assumes spending cuts. The assumptions are that government spending will magically fall from 24.6 per cent of GDP this year to 23.6 per cent. Under your government, government spending actually averaged at 25 per cent of GDP over the last five years, so you actually have to reduce—